October 23, 2005

Japan-China Oil Dispute Escalates

China started drilling in the disputed area 2 years back. Since then, it has had the ability to draw oil and gas from the fields but it had held off doing from doing so. It wanted to gauge the econo-politic situation between the 2 countries. Now, with the yasukuni visit of Mr. Koizumi, China is going ahead full steam in this project. This is a way of expressing their "anger" at the japanese.
This is a very uneasy situation because South Korea and China were the ones who cancelled talks on the foreign ministry and higher level that were to take place in nov and december. With this drilling dispute, Japan will be forced to request China to come back to the negotiating table. This means that Japan cannot hold onto a stronger position because China is drilling within its territory and China is feigning grave injury caused by the shrine visit. Unless Japanese MEA addresses the latter issue, China will not budge on the former. That's gotta be some real unhappy people who are being forced to deal with this matter.
China has completed at least one new drilling platform in the East China Sea and may already be tapping into hotly contested natural gas and oil fields, escalating a dispute with Japan over the rights to billions of dollars worth of underwater energy reserves, according to Japanese reconnaissance data.

The Chinese action, Japanese officials charge, has aggravated a potential flash point in East Asia even as diplomatic relations between Tokyo and Beijing languish. The increasingly uneasy relationship between East Asia's two dominant countries also includes territorial disputes and a heated row over Japan's perceived lack of repentance for World War II-era aggression.

China is rapidly growing into an economic superpower and is hungry for sources of energy and raw materials. Economic ties have grown tremendously between the two nations in recent years, but they remain in fierce regional competition. Both, for instance, are courting Russia in the hopes of securing an advantageous route for a new trans-Siberian pipeline to the Pacific, and they are locked in a battle for diplomatic and economic influence over a host of Southeast Asian nations.

But Japan has grown so alarmed by China's activities in the East China Sea that it dispatched two envoys to Washington this month to brief Bush administration and State Department officials on what authorities here described as a "major threat to Japanese sovereignty."

Officials in Tokyo, speaking on the condition of anonymity given the sensitivity of the issue, said Japanese reconnaissance aircraft in September detected flames atop a stack on a Chinese drilling platform -- an indication it is functional and may have started gas or oil extraction. The platform had been under construction for two years but did not function while Japan and China wrangled over drilling rights in the area, about halfway between Shanghai and Okinawa.


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